A limited constitutional government calls for a rules-based, freemarket monetary system, not the topsy-turvy fiat dollar that now exists under central banking. This issue of the Cato Journal examines the case for alternatives to central banking and the reforms needed to move toward free-market money.

The more widespread use of body cameras will make it easier for the American public to better understand how police officers do their jobs and under what circumstances they feel that it is necessary to resort to deadly force.

Americans are finally enjoying an improving economy after years of recession and slow growth. The unemployment rate is dropping, the economy is expanding, and public confidence is rising. Surely our economic crisis is behind us. Or is it? In Going for Broke: Deficits, Debt, and the Entitlement Crisis, Cato scholar Michael D. Tanner examines the growing national debt and its dire implications for our future and explains why a looming financial meltdown may be far worse than anyone expects.

The Cato Institute has released its 2014 Annual Report, which documents a dynamic year of growth and productivity. “Libertarianism is not just a framework for utopia,” Cato’s David Boaz writes in his book, The Libertarian Mind. “It is the indispensable framework for the future.” And as the new report demonstrates, the Cato Institute, thanks largely to the generosity of our Sponsors, is leading the charge to apply this framework across the policy spectrum.

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Tag: Massachusetts

Massachusetts state treasurer and recent Democrat Timothy Cahill has harsh words for the health plan foisted on his state and the identical plan that President Obama is trying to foist on the nation. From The Boston Globe:

“If President Obama and the Democrats repeat the mistake of the health insurance reform here in Massachusetts on a national level, they will threaten to wipe out the American economy within four years,” Cahill said in a press conference in his office.

Echoing criticism leveled by congressional Republicans in recent weeks, Cahill said, “It is time for the president, the Democratic leadership, to go back to the drawing board and come up with a new plan that does not threaten to bankrupt this country.”

Cahill said the law is being sustained only with the help of federal aid, which he suggested that the Obama administration is funneling to Massachusetts to help the president make the case for a similar plan in Congress.

“The real problem is the sucking sound of money that has been going in to pay for this health care reform,” Cahill said. “And I would argue that we’re being propped up so that the federal government and the Obama administration can drive it through” Congress.

Commonwealth Connector, the independent state agency established to help residents find the health insurance, has “totally failed,” to create competition and connect people with affordable insurance, Cahill said, pointing out that 68 percent of the residents it serves receive subsidized care.

“We haven’t done anything about driving down costs,” Cahill said. “We haven’t helped small business. We haven’t changed the way we pay for health care and the way we deliver it.”…

Asked for solutions today, Cahill said he would seek to “level the playing field” between hospitals that charge different rates for similar procedures, seek to increase competition by allowing health insurance companies plans to sell plans across state lines, and would slash benefits mandated under state law.

What does it say that Democrats are having this much difficulty enacting their health care legislation despite unified Democratic rule? Despite large supermajorities in both chambers of Congress, including a once-filibuster-proof Senate majority (see more below)? Despite an opportunistic change in Massachusetts law that provided that crucial 60th vote at a crucial moment? Despite a popular and charismatic president?

What does it say that 38 House Democrats voted against the president’s health plan?

What does it say that Massachusetts voters elected, to fill the term of Ted Kennedy, a Republican who ran against the health care legislation that Kennedy helped to shape?

What does it say that the only thing bipartisan about that legislation is the opposition to it?

Given that ours is a system of government where ambition is made to counteract ambition, what does it mean that the only way to pass this legislation is for the House to trust that the Senate will keep the House’s interests at heart?

Hoping to revive his increasingly unpopular health care overhaul, President Obama has invited Republicans to a bipartisan summit this Thursday and plans to introduce a new reform blueprint in advance of the summit. On Sunday, the White House announced that a key feature of that blueprint will be premium caps, a form of government price control that helped kill the Clinton health plan when even New Democrats rejected it.

The president’s bill would grant the federal health and human services secretary new authority to review, and to block, premium increases by private insurers, potentially superseding state insurance regulators.

Price and exchange controls inevitably create harmful economic distortions. Both the distortions and the economic damage get worse with time.

For example, as I have written elsewhere, artificially limiting premium growth allows the government to curtail spending while leaving the dirty work of withholding medical care to private insurers: “Premium caps, which Massachusetts governor Deval Patrick is currently threatening to impose, force private insurers to manage care more tightly — i.e., to deny coverage for more services.” No doubt the Obama administration would lay the blame for coverage denials on private insurers and claim that such denials demonstrate the need for a so-called “public option.”

As the Progressive Policy Institute’s David Kendall explained in a 1994 paper, the Clinton health plan contained similar price controls. Kendall explains why they would be a disaster:

In spite of the late hour in the health care debate, Congress has not yet decided how to restrain runaway health care costs. The essential choices are a top- down strategy of government limits on health care spending enforced by price controls or a bottom-up strategy of consumer choice and market competition. History clarifies that choice: Previous government efforts to regulate prices in peacetime have invariably failed. Moreover, government attempts to control prices in the health care sector would undermine concurrent efforts to restructure the marketplace…

The idea of controlling costs by government fiat is seductively simple. But it rests on a conceit as persistent as it is damaging: that government bureaucracies can allocate resources more wisely and efficiently than millions of consumers and providers pursuing their interests in the marketplace. The alternative – one rooted in America’s progressive tradition of individual responsibility and free enterprise – is to improve the market’s ground rules in order to decentralize decision-making, spur innovation, reward efficiency, and respect personal choice.

As centrally planned economies crumble around the world, many in the United States seem bent on erecting a command and control economy in health care. This policy briefing examines the reasons why government price regulation would fail to constrain health care costs and create many adverse side effects…

Ultimately, government price regulation will always fail because it does not change the underlying economic forces driving up prices. If we are serious about slowing the growth of health care costs, we have to change the ways we consume and provide medical care. Price controls evade the hard but essential work of structural reform in health care markets: They are a quintessentially political response to an economic problem. The alternative is to allow well-functioning markets to set prices and allocate resources, while ensuring that all Americans have access to affordable health care coverage. The market-oriented approach leaves decisions to cost-conscious consumers and health care providers rather than bureaucrats.

Obama’s in a difficult spot: His head tells him to tack right, but his heart’s not in it – and he’s not the first Democrat to be in that spot. That’s brought out today in a CNN Opinion piece, “When liberals revolt,” written by Arena’s (and Princeton’s) Julian E. Zelizer. Tracing similar dilemmas that Johnson, Carter, and Clinton faced, Zelizer shows how they all paid a price for tacking right, which it looks like Obama may do. Johnson faced primary challenges that led him to withdraw from the 1968 race. Carter was challenged by Ted Kennedy. He prevailed; but weakened, he then lost to Reagan in 1980. And Clinton’s move to the center after the disastrous 1994 midterm elections helped him win reelection, Zelizer argues, but it also left him with a thin legislative record on domestic policy.

In short, moving right has its costs, Zelizer claims. Many liberals are “deeply unhappy with the president, believing that he has already drifted too far away from the promises that animated his supporters in 2008.” He’ll need those liberals in 2010 and 2012. Pointing to the “long tradition of Democratic presidents taking the left for granted at a cost to their administrations,” Zelizer notes that they learned “that the ire of the left – a constituency that is very vocal, highly mobilized and politically engaged – can cause enormous damage.”

That it can. But can the left do more than cause enormous damage? In particular: Can it govern? Zelizer cites Ted Kennedy castigating Carter, saying that ”the Democratic Party needed to ‘sail against the wind’ of conservative public sentiment by using the federal government to help alleviate social problems.” Fine speechifying. But will it get you (re)elected – much less enable you to govern? The evidence is not encouraging. In fact, the deeper problem the left is facing is that self-identified conservatives in America outnumber liberals by better than two to one. Cambridge may have voted against Scott Brown by 84 to 14, but that just shows how out of touch Harvard is with the rest ofMassachusetts – to say nothing of the rest of the country. Obama won not because the country was enthralled with his vague message, but because his opposition, like Clinton’s in 1996, was so uninspiring. In sum, the left’s problem – and Obama’s – is that the country isn’t buying the message, now that it’s clearer. And that’s the heart of the matter.

Yesterday, Cato released a new study, “The Massachusetts Health Plan: Much Pain, Little Gain,” which showed that official estimates overstate the gains in health insurance coverage resulting from a 2006 Massachusetts law by at least 45 percent. The study also finds: supporters understate the law’s cost by nearly 60 percent; government programs are crowding out private insurance; self-reported health improved for some but fell for others; and young adults are responding to the law by avoiding Massachusetts.

Given that the Massachusetts health plan bears a “remarkable resemblance” to the Obama plan, the study should serve as a warning sign to members of Congress, says Michael Cannon, director of health policy studies.

In this new video, Cato’s David Boaz and John Samples evaluate what Scott Brown’s victory in Massachusetts means for Democrats and Republicans in the near and far term. Samples and Boaz contend that Tuesday’s election sent a message to Democrats that they have clearly overreached, but Republicans need to be careful and realize that they’re still not very popular either.